(CNN) — In our most current weekly roundup, CNN Journey celebrates like stories: The gal pals who bonded around marriage misgivings, the 22-yr-olds who found their life spouse by shopping for cheapskate standby tickets and the gibbon who mystified zookeepers by possessing a toddler when she lived by itself in her cage.
Really like, sweet love
Life’s turning details take place on the journey, not at the desired destination.
Maggie Musgrave was traveling back again from her bachelorette celebration, crying since she thought the marriage was a blunder, when she located ease and comfort by chatting with fellow traveler Cindy Jarrin at a Miami airport. Maggie’s relationship didn’t operate out, but her ten years-very long friendship with Cindy is a appreciate story for the ages.
And 22-12 months-previous Vickie Moretz had never ever still left the southern United States when she and her good friend booked standby flights to London in 1982 — without having knowing what standby meant. Soon after pleading with airline employees, Vickie received the really final seat on the airplane and was seated upcoming to a 22-yr-aged Englishman named Graham. They married right before the conclude of the 12 months and, four decades on, theirs is a whirlwind romance that hardly ever stopped.
Place Europe
No, you are not just imagining it. European places actually are booking up rapid, even in off-year.
On the net reserving platforms, tour operators and lodge firms confirm that US tourists are hectic packing their bags for transatlantic adventures ahead of spring leaves are even in bud. The amplified need is pushing up price ranges, as well. Here’s our report so you can start performing on your 2023 family vacation tactic.
Oversubscribed locations are being ever more selective about the styles of vacationers they want to appeal to. The newest shift in Amsterdam’s “stay absent” campaign to discourage celebration-hungry tourists is to ban marijuana use on the streets of its purple light-weight district.
And late very last 12 months, a French ski resort grew to become the to start with in Europe to ban tobacco smoking in all its communal locations.
Wildlife security
Mexico has banned shark-connected tourism actions on Guadalupe Island off the coastline of Baja California, a popular spot for pursuits together with cage diving and sport fishing. The wildlife safety conclusion successfully ends the island’s when-busy tourism financial system.
Last but not least, federal authorities opened an unattended bag at a Detroit airport and identified a young dolphin’s cranium. It really is been handed above to US Fish and Wildlife Support inspectors for investigation.
‘Ghost ships’ of the Baltic
Divers Jonas Dahm and Carl Douglas have devoted 25 years to wreck-hunting. A book now gathers with each other their eerie photographs of the barnacle-clad vessels they have found out in the icy waters of the Baltic Sea.
Baggage tracking
Travellers are receiving increasingly proactive when it will come to shed luggage, with many applying GPS trackers to locate their lacking bags — these kinds of as expert poker player Steve O’Dwyer, who went on an epic campaign, such as a stay Tv set broadcast, to retrieve his bag from London Heathrow.
Our partners at CNN Underscored, a solution opinions and tips tutorial owned by CNN, have place collectively nine AirTag recommendations and tips to assistance you get the most out of your Apple tracker.
In case you skipped it
A feminine gibbon who lived by yourself in her cage had a child.
When sunlight and drinking water strike just ideal, the “Firefall” at Yosemite National Park is one of nature’s miracles.
But for the February 2023 time, you can expect to will need reservations for certain dates.
A FedEx aircraft landing in Texas nearly hit a Southwest flight getting off.
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Share on PinterestA analyze located a backlink concerning eating a single to a few eggs per week and a significantly reduce possibility of creating cardiovascular ailment. Natalia Mishina/Stocksy
A new Greek examine asserts that having just one to a few eggs a 7 days can reduce the danger of cardiovascular illness by additional than fifty percent.
The analyze described the 10-12 months cardiovascular effects of self-described egg usage.
The healthfulness of eggs is a controversial subject.
A single specialist told Medical News Currently that there are significant concerns with the self-noted info on which the new study is centered.
A new analyze revealed in Vitamins explored how egg usage influences one’s coronary heart health, and the paper’s authors claimed a striking obtaining.
The examine indicates consuming just one to a few eggs a 7 days is related with a 60{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} lessen chance of establishing cardiovascular condition.
In fact, the examine uncovered an even lower danger of developing cardiovascular illness, 75{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, for those eating 4 to 7 eggs a week. Even so, they only identified a protective part in eating one to 3 eggs a 7 days immediately after thinking of sociodemographic, life-style, and medical elements. The authors concluded that egg consumption might have a protecting role against cardiovascular disease when bundled in healthful food plan with reduced consumption of saturated fatty acids.
There is a good deal of investigation investigating the healthfulness of eggs, notably with regard to heart health and fitness. On the other hand, the findings have been contradictory. Several research, which include 2019 analysis, identified that consuming eggs basically increases cardiovascular risk. And a earlier assessment research sought to summarize and explain the science, its title asking tongue-in-cheek, “Are eggs good once more?”
Eggs produce substantial excellent vitamins, these as proteins, minerals, extra fat-soluble natural vitamins, iron, and carotenoids. At the identical time, they also include substantial stages of saturated fatty acids and sizeable amounts of cholesterol, which are viewed as negative for the heart.
As a consequence, it is complicated to identify no matter if eggs are fantastic for your heart or lousy.
The new review surveyed healthy guys and women of all ages living in Greece’s bigger metropolitan Athens spot concerning their egg-usage behaviors. For the 1,514 guys in the analyze, the signify age was 46, moreover or minus 13 years. For 1,528 females, it was 45, furthermore or minus 14 many years.
The study commenced in 2001 with 3042 individuals. The last 2011-2012 abide by-up well being assessments provided 2020 of these men and women.
Scientists questioned individuals to self-report their monthly usage of eggs, possibly by itself or as recipe elements. They then divided these figures into weekly consumption levels.
A single of the authors of the evaluation review mentioned over is Dr. Angela Zivkovic, affiliate professor and leader of the Zivkovic Lab at the College of California, Davis. Dr. Zivkovic was not involved in the current research.
Dr. Zivkovic pointed out to Professional medical News These days that the self-described character of the new study’s facts calls its findings into concern:
“Ask you how effectively you don’t forget what you ate for breakfast two days back, substantially much less 6 months back, until you materialize to be anyone who eats the precise same factor for breakfast just about every working day.”
In addition, “Depending on how well individuals in fact keep in mind what they ate and/or feel like they should really report mainly because of what they assume they are ‘supposed to’ try to eat,” added Dr. Zivkovic, “you may possibly be reporting additional on the psychology and memory than the actual food stuff ingestion.”
Dr. Zivkovic also cited the deficiency of nutritional context supplied in the study, saying, “The truly essential concern is ‘what have been the folks who described consuming one to 3 eggs per working day not consuming?’”
The new study doesn’t seize the foodstuff eggs changed, these kinds of as pink meats, bread, or even vegetables. Based mostly on participants’ saturated fats concentrations, Dr. Zivkovic suspected they were probable ingesting significantly less purple meat or other saturated unwanted fat-loaded meats.
Michelle Routhenstein, cardiology dietitian and preventive cardiology nutritionist at EntirelyNourished, agreed that the satiating nature of eggs “may help individuals consume much more deliberately, and not consume other processed or refined foodstuff that can lead to an maximize in cardiovascular threat.” Routhenstein was not associated in the analyze.
Devoid of these context, it is tricky, Dr. Zivkovic said, to know what the researchers were being actually looking at. “That context is anything.” She explained a adhere to-up study to this investigation as an illustration of context’s importance:
“If I designed the analyze this kind of that folks were being fed three eggs for meal in the intervention group and the handle team ate pork sausages alternatively, you would probably discover the group eating eggs had minimized danger. But if the regulate team ate a salad loaded with carotenoid-abundant greens with egg white as the protein resource, you might obtain the salad team as the one particular with the diminished hazard.”
In accordance to Dr. Zivkovic, health is not primarily based on single meals but on one’s full food plan.
“Can eggs be a part of a wholesome diet plan that is consistent with the avoidance of heart condition? Completely. [Are they] the appropriate alternative for all people? No.”
It is true, Routhenstein discussed, “Eggs are… a abundant source of Vitamin B2, B12, and selenium, which are cardioprotective.” The Vitamin B2 and B12 they include, she additional, can assist normalize homocysteine stages that, when elevated, could result in arterial plaques. Routhenstein also credited eggs’ selenium for supporting to combat the oxidative worry that is a principal ingredient of heart disease.
More excellent information, mentioned Dr. Zivkovic, is that interventional research obtain that “eggs do not enhance complete cholesterol, and can, in fact, strengthen the cholesterol efflux ability of HDL [cholesterol] particles.”
“But the substantial cholesterol and choline written content of eggs could be a difficulty for specific men and women who are at chance for coronary heart disorder.” said Routhenstein. “So, even though eggs may possibly be able to be included in a coronary heart balanced diet program, the volume must be somewhat constrained. The total diet regime should be evaluated for exceptional threat reduction.”
Haley could quite probable have it worse than the candidates did in 2016, encountering a veritable excitement saw of sexist and racist attacks from the minute she declares her presidential run. That is simply because the base of the Republican Celebration, the most rabid and fully commited most important voters, has turn out to be a lot more male and much more much-right because Trump grew to become the social gathering common bearer. Misogynist ideology and despise has proliferated so substantially among in latest many years that the Southern Poverty Legislation Middle has started tracking “Male Supremacy” teams. Teams like the Oath Keepers and Proud Boys that supported Trump and have viewed customers convicted of seditious conspiracy for involvement in the January 6th insurrection on the Capitol are also rabidly anti-woman. Happy Boys founder Gavin McInnes informed listeners on his podcast that, “Maybe the rationale I’m sexist is for the reason that ladies are dumb.” Avowed White Supremacist Nick Fuentes, who dined not long ago with Trump at Mar-A-Lago, has advised followers that his great earth is one particular the place the “women don’t have the proper to vote,” a single in which “women are putting on veils at church,” and “women [aren’t] in the workforce.”
In a further era these extremists could be safely relegated to the political margins, but right now they are enjoying a far more central job than ever. Although Kevin McCarthy and some other Republican leaders have condemned Fuentes, Trump himself refused to disavow him and dozens of lawmakers refused to remark about it both way. Fox Information host Tucker Carlson, who proceeds to love some of the highest ratings in cable Tv set, has employed his sizeable platform to start racist and sexist assaults that have come to be additional overt and a lot more vitriolic in the previous number of a long time.
Of study course, Trump, as the only declared Republican presidential prospect, looms huge. He created his base on attacking women, specifically girls of color. From endlessly debasing women journalists, political leaders and general public figures who have criticized him to his braggadocio on the “Access Hollywood” tapes and racist rants in opposition to Secretary Elaine Chao Trump has by no means tried out to conceal his distain in even nominal veneer. He even introduced Roger Ailes, who right before his dying in 2017 had been accused of sexual harassment by at least 20 gals, on as an adviser to his campaign and appointed Monthly bill Glow, who was accused of covering up sexual harassment for the duration of his time at Fox Information, as White Property communications director. Researchers identified that in the 2016 election “hostile sexism” was a most important predictor of guidance for Trump, next only to celebration affiliation.
Astonishingly, it is not just Trump or correct-wing extremist men that push sexist ideology in the Republican Social gathering. Congresswomen Marjorie Taylor Greene and Lauren Boebert have both equally embraced anti-feminism, irrespective of their have vocation ambitions. It’s a development which is not specifically new. Phyllis Schlafly, who was amongst the to start with distinguished conservative women of all ages to again Trump when he ran for president, properly fought passage of the Equivalent Legal rights Amendment, and railed versus equivalent legal rights for gals even as she was benefiting from the program she fought. But these attitudes pose a specifically major risk right now mainly because so many of the figures most at relieve with hostile sexism now maintain positions of serious energy in the Republican Social gathering. Lauren Boebert may be a back bencher, but she was part of the crew that held McCarthy’s speaker vote hostage. She advised the Denver Submit that she thinks “women are the lesser vessel, and we require masculinity in our lives to balance that.” Taylor Greene, who now retains management positions on Congressional committees and is vying to be Trump’s managing mate in ’24, explained to an interviewer that Satan was manipulating women of all ages into owning abortions.
Haley faces a substantial hurdle in even convincing Republican voters that a female can be president. A December 2022 United states of america Nowadays poll revealed just how demanding gender is in Republican politics. Overall, a greater part of voters (55 per cent) say that gender doesn’t make any difference in presidential elections. Those people who did have a desire selected a male president by a lot more than 2-1, 28 p.c-12 p.c.
Amid Republicans, 50 p.c reported the perfect president would be male while a paltry 2 per cent stated she would be feminine. In contrast, Democrats with a preference selected a woman above a person by 2-1, 24 per cent-11 per cent. Amongst all those voters with a choice, guys by 8-1 most well-liked a male president more than a feminine one particular, 32 per cent-4 {515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}. Even women were relatively additional most likely to prefer a male president (25 p.c-19 percent).
Politics is as substantially about time and area as it is about expertise. And in this time and area, the hurdles for a lady in the Republican Occasion are exceptionally higher. No matter if we agree with Haley’s positions or not, we really should all root for a degree political enjoying area that stays in the bounds of decency and civility. Sad to say, in today’s Republican political actuality, the probabilities that takes place are slender to none.
Soon after calling for a economic downturn through the 1st 50 {515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of past 12 months and then for considerably of the latter 50 percent saying just one was most likely in 2023, some in the economical neighborhood are now reversing system.
Wall Road titan Goldman Sachs, currently an outlier with forecasts of a very low probability of a economic downturn, further more downgraded the odds of a economic downturn in just the up coming 12 months to 25{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from its prior 35{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} on Monday. The revision arrived immediately after the government described on Friday that the financial state additional 517,000 positions in January, nearly 3 moments the quantity that had been forecast.
“Continued power in the labor market place and early indicators of improvement in the enterprise surveys advise that the hazard of a close to-term slump has diminished notably,” the financial institution said in a research observe.
Incorporating to the optimism was Friday’s report from the Institute for Source Management that its products and services sector index enhanced to 55.2 very last thirty day period, just after acquiring fallen to 49.2 in December.
Even though Goldman has been between the most bullish on the odds of a recession, the Bloomberg survey of economists past thirty day period pegged the chance of 1 taking place this calendar year at about 70{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} – but that was down from 100{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in Oct.
And whilst Jeffrey Roach, chief economist at LPL Economical, is continue to in the economic downturn-is-very likely camp, he does think any contraction in the financial state would be restricted.
“A possible economic downturn this 12 months will probable be shorter than the put up-war ordinary mainly because customers show up to be on improved footing with accessibility to a scorching labor marketplace and nonetheless holding on to a big sum of money,” Roach said on Tuesday. “Unemployment premiums are at historic lows, occupation openings are continue to pretty significant, and checkable deposits and cash market place accounts are flush with funds. Of program, these statements are designed in the aggregate and do not account for the immense financial difficulties felt by decreased revenue homes through this period of time of stubbornly high inflation.”
“The chance of a recession this year is not because of to fundamental flaws in the credit marketplaces, nor are we forecasting a resurgence of a global pandemic,” Roach extra. “Rather, we believe the hazard of a recession in 2023 is because of to a pullback in buyer investing as households come to be far more timid about economic uncertainty. Owing to these motives, a opportunity recession in 2023 will probably be quick and shallow.”
The warming sentiment comes as the financial state seems bolstered by both of those energy in the labor market and evidence that the approach of disinflation “has started,” as Federal Reserve Chairman Jerome Powell stated in a speech on Monday. Powell reported that notable enhancement had been designed in selling prices for items and that comparable moves were anticipated in rents and other housing expert services.
But, he additional, the Fed has nonetheless to see a significant alter in the rates of general expert services.
“There is 56{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of the overall economy, which is the rest of the services sector,” Powell claimed at a collecting of the Financial Club of Washington. “It’s the most significant section, definitely, and we’re not looking at disinflation there but. And that’s heading to take some time.”
“We need to be client, and we think we’re likely to want to retain prices at a restrictive level for a period of time just before that arrives down,” Powell claimed.
The temper in the marketplaces implies investors are betting that the downward development in inflation will keep on and the economy’s resilience will get out. The S&P 500 hit a five-thirty day period significant final 7 days and the markets rallied as Powell spoke, with the Dow Jones Industrial Typical up extra than 250 points on Monday.
The GDPNow estimate for very first-quarter advancement in gross domestic merchandise from the Federal Reserve Lender of Atlanta is now 2.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, up from just .7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} on Feb. 1.
“After releases from the US Census Bureau, the Institute for Offer Management, the US Bureau of Labor Data, and the US Bureau of Economic Evaluation, the nowcasts of to start with-quarter gross personal usage expenses progress, and first-quarter gross personal domestic investment advancement amplified from 1.9 percent and -9.3 per cent, respectively, to 3. percent and -6.2 percent, respectively,” the bank explained.
That is not to say the economic climate has not slowed. The housing sector, in individual, has cooled from its purple-scorching pace of final year, with pending house revenue off by a 3rd from a year ago. But December observed an improve of 2.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in income, the to start with boost given that May perhaps of 2022.
Offer chains are returning to usual and with them, shipping prices. Those experienced spiked as the world financial state recovered from the results of the coronavirus pandemic, creating selling prices to increase for many items.
“Looking back again, January had undesirable economic information but fantastic market place final results. February could perfectly be the reverse,” stated Brad McMillan, chief investment officer for Commonwealth Economical Community. “Even if it is, the prospective buyers for the rest of the calendar year carry on to look very good. And that is the base line in this article. Though we do have headwinds, the robust January mirrored actual advancements in many parts. Searching ahead, we really should see the exact same form of economic resilience above time as these advancements go on.”
World-wide freight shipper Maersk mentioned in its earnings report Wednesday that immediately after a document 2022, there is an “expectation that inventory correction will be comprehensive by the stop of H1 top to a a lot more balanced desire natural environment, that 2023 global GDP development stays muted, and that the international ocean container marketplace will grow in a vary of -2.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} to +.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}.”
When no just one is forecasting a banner 12 months for the economy, there is a sense that perhaps any downturn that could manifest would be considerably less than at first anticipated.
“Market sentiment has been really beneficial more than the final two months,” claimed Melissa Brown, running director of used investigate at Qontigo, a world-wide provider of financial investment indices. “We shouldn’t underestimate the ingenuity of people” to alter to financial modifications.
Stocks declined, with the S&P 500 falling 1.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} last week. The index is now up 6.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year to date, up 14.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from its October 12 closing low of 3,577.03, and down 14.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from its January 3, 2022 closing high of 4,796.56.
Over the past two weeks or so, it seems attitudes have begun to shift favorably regarding monetary policy, economic growth, and the trajectory of stock prices.
1. The Fed acknowledges inflation is coming down 🦅
In May of last year, Fed Chair Jerome Powell warned “there could be some pain involved in restoring price stability.” A month later, we learned inflation was unexpectedly heating up again. And then on June 15, the Fed announced an eye-popping 75-basis-point interest rate hike, the largest increase the central bank made in a single announcement since 1994.
Fast forward to February 1, following several months of cooling inflation data, when Powell said at the conclusion of the Fed’s monetary policy meeting: “We can now say, I think, for the first time that the disinflationary process has started. We can see that.“ (Emphasis added.)
The consumer price index has cooled significantly, signaling disinflation. (Source: BLS via FRED)
“Powell cited the word ‘disinflation’ 13 times in this press conference,” Tom Lee, head of research at Fundstrat Global Advisors, wrote that day in a note to clients. “This is a major change in language and tone and shows that the Fed is now officially recognizing the growing disinflation forces underway. In [the December press conference], ‘disinflation’ was used ZERO times by Powell.”
“In our view, Chair Powell is placing more weight on an ‘immaculate disinflation’ scenario, where inflation pressures subside without some softening in labor market conditions, including higher unemployment,” Michael Gapen, U.S. economist at BofA, wrote on Tuesday. “This stands in contrast to the Powell from Jackson Hole, Wyoming, last August, who leaned strongly into doing whatever it takes to bring inflation down and emphasized that inflation was unlikely to subside without some ‘pain’ in labor markets.”
As long as the inflation numbers continue to trend on the cooler side, the Fed seems likely to keep its less hawkish tone.
2. The economy is less likely to go into recession 💪
I can’t pinpoint exactly when the consensus among economists was that the U.S. was due for a recession. The worries certainly intensified after we learned GDP growth was negative in Q1 of last year, and they got a whole lot worse when we learned growth was negative in Q2 as well.
On Monday, Goldman Sachs economist Jan Hatzius published a note titled, “Receding Recession Risk,“ in which he lowered the odds of the U.S. entering a recession in the next 12 months to 25{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from 35{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}.
“Continued strength in the labor market and early signs of improvement in the business surveys suggest that the risk of a near-term slump has diminished notably,“ Hatzius wrote.
The S&P 500 is up 6.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in 2023 so far, and the index has spent much of this period higher than where it started the year.
At least one top strategist has abandoned his call for an early sell-off. Here’s Goldman Sachs’ David Kostin in a Feb. 3 note to clients (emphasis added):
Recent macro developments have strengthened our economists’ confidence in a soft landing and reduced equity downside risk in the near term. Outside the US, the growth picture in China has brightened following an earlier-than-expected reopening and Europe is now on track to avoid a recession following a warmer-than-expected winter. In addition, Fed Chair Powell this week did little to push back on the easing of financial conditions. Our rates strategists’ expected path of Treasuries suggest little near-term upside to yields. We therefore believe the risk of a substantial drawdown in the near term has diminished, barring unforeseen data surprises. We raise our 3-month S&P 500 price target to 4,000 (-3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from today) from 3,600. As shown this week, still-light institutional investor positioning points to the risk of a chase that would see the market temporarily overshoot our S&P 500 target of 4,000.
Most of the S&P 500 have announced quarterly financial results in recent weeks, and based on what they’ve revealed, it looks like the outlook for earnings may not be as grim as previously anticipated.
“[W]e see no recession ahead in the broad economy — or in earnings — but a soft landing,” Ed Yardeni, president of Yardeni Research, said on Tuesday (h/t Carl Quintanilla). “We are currently estimating that S&P 500 operating earnings will be up 4.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} this year to $225 per share and 11.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} next year to $250.”
S&P 500 earnings are expected to grow in 2023 and 2024. (Source: Yardeni Research via @CarlQuintanilla)
The S&P 500 is currently trading above most strategists’ year-end target for the index. Should these gains hold and perhaps improve, we could soon see some strategists revise up their targets.
Not everyone thinks resilient economic growth is unambiguously good news.
“With very strong job growth, a higher labor force participation rate, and a decline in the unemployment rate to the lowest level since 1969, it is beginning to look more like a ‘no landing’ scenario,” Apollo’s Torsten Slok wrote in a February 4 note. “Under the no landing scenario the economy does not slow down, and upside risks to inflation are coming back after the initial decline in inflation driven by supply chain improvements.”
But if there’s one thing we’ve learned in recent months, it’s that we can simultaneously have consecutive months of healthy job growth and inflation readings that come in cool. For more on this dynamic, read:The bullish ‘goldilocks’ soft landing scenario that everyone wants 😀.
As always, time will tell what actually happens. But for the time being, the optimists appear to be triumphing over the pessimists as inflation, economic growth, and stock prices have been trending favorably in recent months.
Did you know cricket is the second most watched sport in the world? And it’s emerging in the U.S. in a big way. From JohnWallStreet:
…American Cricket Enterprises (ACE), the entity operating Major League Cricket (MLC), has raised more than $100 million. ACE founders Sameer Mehta, Vijay Srinivasan, Satyan Gajwani and Vineet Jain — and the balance of company investors — are betting the league will be able to draw the sport’s top players and attract interest from fans around the globe, becoming a staple of the cricket calendar in the process. If it can, club valuations will “grow like a hockey stick,” Sanjay Govil (chairman, Infinite Computer Solutions and CEO, Zyter Inc.) said. Govil owns the team in Washington D.C. Dallas, San Francisco, Los Angeles, New York City and Seattle will also have clubs playing in the inaugural ’23 season, which is slated to take place from June 13-30.
Reviewing the macro crosscurrents 🔀
There were a few notable data points from last week to consider:
— a composite of various supply chain indicators — fell in January and is hovering at levels seen in late 2020. It’s way down from its December 2021 supply chain crisis high.
📈 Inventory levels are up. According to Census Bureau data released Tuesday, wholesale inventories climbed 0.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} to $932.9 billion in December. The inventories/sales ratio was 1.36, up significantly from 1.24 the previous year.
👍 Consumer sentiment is improving. From the University of Michigan February Survey of Consumers: “After three consecutive months of increases, sentiment is now 6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} above a year ago but still 14{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} below two years ago, prior to the current inflationary episode. Overall, high prices continue to weigh on consumers despite the recent moderation in inflation, and sentiment remains more than 22{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} below its historical average since 1978.“
🛍️ Consumers are spending. From BofA: “We saw signs of strengthening in consumer spending in both retail and services in January, accelerating from December. Total Bank of America credit and debit card spending per household was up 5.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} YoY in January, vs. 2.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} YoY in December. On a month-over-month (MoM) seasonally adjusted (SA) basis, total card spending per household was up 1.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, more than reversing the 1.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} MoM decline in December.“
🍻 They’re buying cheap beer. From FreightWaves’ Rachel Premack: “…Beer became suddenly pricey at the end of last year. Beer prices at retail, which doesn’t include bars or restaurants, popped 7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} during the last 13 weeks of 2022… That price increase is showing up in how people are buying brews, said Dave Williams, vice president of Bump Williams Consulting. People are increasingly buying, say, 12-packs over 30-packs or even single servings of beer. They’re trading down too — snagging the more economic Keystone over comparatively pricey Coors. That explains why the “below premium” segment was the only one to see an increase in demand in January compared to January 2022, according to the National Beer Wholesalers Association’s Beer Purchasers’ Index…”
💳 Consumers are taking on more debt, but levels are manageable. According to Federal Reserve data, total revolving consumer credit outstanding increased to $1.196 trillion in December. Revolving credit consists mostly of credit card loans.
While the aggregate borrowing seems high, they’re much more reasonable when you look at consumer finances more holistically. From BofA: “On the savings side, Bank of America internal data suggests median household savings and checking balances across income groups have been trending down since April 2022, with the lowest income group (<$50k) seeing the steepest drawdown. But deposits remain above 2019 levels (Exhibit 6) for all income cohorts.“
💳 No, they are not maxing out their credit cards. From BofA: “Lower income consumers appear to still have some level of comfort in terms of their financial constraints. On the one hand, the ratio of median household card spending to median deposit balances (spending-to-savings ratio) remained lower than in 2019 for households with an annual income of less than <$150k (Exhibit 7). This suggests this cohort’s spending would not need to be reduced too much for the spending-to-savings ratio to return to 2019 levels. On the other hand, the Bank of America credit card utilization rate also remained lower than in 2019 across income groups (Exhibit 8).“
💵 Consumers are getting more on their savings accounts. From Semafor’s Liz Hoffman: “The average savings account rate has quintupled since last January to 0.33{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, according to data from the U.S. Federal Deposit Insurance Corporation…“
🤔 Low union participation helps explain low wage growth. From UBS: ““Wage growth is slowing noticeably along multiple measures even with a decades low unemployment rate. Why? … One reason could be low bargaining power for workers… The share of unionized workers among private employees fell to 6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in 2022, according to the BLS.”
💰 Wall Street is busy. From Bloomberg on Tuesday: “About seven IPOs are expected to raise a combined $900 million and begin trading by Friday [Feb. 10], making for the busiest week since October’s $990 million listing by Intel Corp.’s self-driving technology unit Mobileye Global Inc., according to data compiled by Bloomberg. [Last] week’s debuts include solar power equipment maker Nextracker Inc., which plans to raise as much as $535 million in what would be the year’s biggest deal yet. Enlight Renewable Energy Ltd., which is already public in Israel, plans to add a listing on the Nasdaq.“
And it’s not just IPOs. There were numerous reports of dealmaking activity last week involving some big names (link).
📉 👎 Big companies announce layoffs. On Monday, Bloomberg reported that Dell Technologies would be “eliminating about 6,650.“ On Tuesday, Zoom announced it would “say goodbye to around 1,300 hardworking, talented colleagues.“ On Wednesday, Disney announced it would be “reducing our workforce by approximately 7,000 jobs.“ On Thursday, News Corp announced “an expected 5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} headcount reduction, or around 1,250 positions,” and Axios reported that Yahoo would lay off “more than 1,600 people.”
Here’s UBS economist Paul Donovan offering some perspective: “Another company—Disney this time — has announced headcount reductions. We get US initial jobless claims data [Thursday], and the macroeconomic data does not match the high profile press releases of job losses. A major reason is that large companies are not that important economically — smaller businesses matter most to labor markets. Smaller businesses tend to have underemployment rather than unemployment. It is quite hard to fire 10{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of a three-person company.“
⚠️ More big layoff announcements to come? Goldman Sachs economists think it’s possible. From a research note published Monday: “…on the negative side, there could be additional layoff announcements yet to come from other large companies, as roughly 15{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of companies in the S&P 500 have seen headcount increases of 40{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} or more since the start of the pandemic (Exhibit 4), and only one-fifth of them have announced layoffs so far.“
(Source: Goldman Sachs)
But: “…on the positive side, similar to the rebalancing seen so far in the broader labor market, even these companies that have announced layoffs have reduced their total demand for workers overwhelmingly by reducing job openings rather than by conducting layoffs.“ For more on job openings, read:How job openings explain everything in the economy and the markets right now 📋.
Also: “…Exhibit 7 shows that most industries (8 out of 11) have reemployment rates above pre-pandemic levels, including the information sector (the sector of most major tech companies), and that all of them have reemployment rates that are above the recent expansion average.”
(Source: Goldman Sachs)
I’ve started an informal thread on Twitter tracking anecdotes of companies hiring (Link).
💼 Unemployment claims remain low.Initial claims for unemployment benefits climbed to 196,000 during the week ending Feb. 4, up from 183,000 the week prior. While the number is up from its six-decade low of 166,000 in March, it remains near levels seen during periods of economic expansion.
🏠 On work from home #WFH. From Stanford professor Nick Bloom: “Data on 4,000 U.S. firms #WFH policies: 1) 50{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of firms are fully on-site, like food-service, accommodation and retail, 2) 40{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} combine #WFH and in person days in various ways: min-days, anchor days, employee choice etc, 3) 8{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} are fully remote“
Putting it all together 🤔
We’re getting a lot of evidence that we may get the bullish “Goldilocks” soft landing scenario where inflation cools to manageable levels without the economy having to sink into recession.
And the Federal Reserve has recently adopted a less hawkish tone, acknowledging on February 1 that “for the first time that the disinflationary process has started.“
Nevertheless, inflation still has to come down more before the Fed is comfortable with price levels. So we should expect the central bank to continue to tighten monetary policy, which means we should be prepared for tighter financial conditions (e.g. higher interest rates, tighter lending standards, and lower stock valuations). All of this means the market beatings may continue and the risk the economy sinks into a recession will be elevated.
